M&A Kicks Into Gear (TIF, T, VZ, OXPS, SCHW, VRGY, ATE, LTXC, URZ, CAGC)
Stocks had a strong day, buoyed by a spate of acquisitions and more importantly an improving situation at the Fukushima Dai-ichi plant in Japan. The news overshadowed the U.S. and its U.N. allies getting involved in Libya, higher oil prices, and the growing possibility of a bailout for Portugal. We would expect the market to remain volatile in the near term given all the geopolitical and other risks present. However, we continue to remain more upbeat about the long term, as the economic recovery continues to progress.
The Uranium Stocks Index was the top performing tickerspy Index on the day, led by Uranerz Energy (URZ) with a 25% gain. The Chinese Agriculture Stocks Index was the day’s worst performing tickerspy Index, with China Agritech (CAGC) down -9%.
Stocks climbed on the day, with the Dow jumping 178 points to 12,037. The S&P soared 19 points to 1,298, while the Nasdaq zoomed 48 points higher to 2,692. Oil rose $1.26 to $102.33 a barrel, while gold advanced $10.30 to $1,426.40 an ounce.
In economic news, the National Association of Realtors said home sales plunged -9.6% in February to a seasonally adjusted rate of 4.88 million units as the median home price fell to its lowest level in nine years. Economists typically say 6 million units sold represents a bullish figure.
In earnings news, shares of high-end jewelry retailer Tiffany (TIF) jumped 5.1% after the company reported a fiscal fourth-quarter profit of $181.2 million, or $1.41 per share, compared with $140.4 million, or $1.09 per share, a year earlier. Revenue rose 12% to $1.1 billion. Excluding one-time items, Tiffany earned $1.44 a share. Analysts were expecting a profit of $1.38 a share on revenue of $1.09 billion. The company lowered its first-quarter guidance to 57 cents a share, down from a previous forecast of 62 cents. Analysts are expecting a profit of 55 cents. For the full year, Tiffany expects an adjusted profit of $3.35-$3.45 a share compared with the consensus estimate of $3.70. Ten pros held Tiffany in their portfolios at the end of 2010 and almost 200 tickerspy members own the stock in their portfolios.
Telecom operator AT&T (T) announced on Sunday that it will pay $39 billion in cash and stock to acquire Deutsche Telekom’s T-Mobile wireless business, a deal that will allow AT&T to surpass rival Verizon (VZ) to become the largest U.S. wireless carrier. AT&T will gain almost 34 million new subscribers through the deal, which is the largest in the wireless sector since 2004 and AT&T’s biggest purchase since its $83 billion buy of Bell South in 2003. AT&T will pay Deutsche Telekom a $3 billion breakup fee if the deal falls through. Shares of AT&T rose 1.2%. More than 350 pros held AT&T in their portfolios at the end of 2010 and almost 3,100 tickerspy members own the stock in their portfolios.
Shares of online options broker optionsXpress (OXPS) surged 16.8% after rival Charles Schwab (SCHW) said it will acquire the company for $1 billion in stock in a deal that values optionsXpress at a 17% premium to where the shares closed on Friday. optionsXpress shareholders will receive 1.02 shares of Schwab for each share they own. Schwab is using the transaction to bolster its exposure to the options market. The deal is expected to close in the third quarter.
Shares of Verigy (VRGY) soared 10.3% after the maker of semiconductor test systems said it received an acquisition offer from Advantest (ATE) that is superior to its planned merger with LTX-Credence (LTXC). Advantest’s offer values at Verigy at $910.8 million, or $15 a share. Verigy has given LTX-Credence until March 25 to make a new deal.
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